(Published in Part - III Section 4 of the Gazette of India, Extraordinary) Tariff Authority for Major Ports. G.No. 76 New Delhi, 26 February 2018

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1 (Published in Part - III Section 4 of the Gazette of India, Extraordinary) Tariff Authority for Major Ports G.No. 76 New Delhi, 26 February 2018 NOTIFICATION In exercise of the powers conferred by Section 48 of the Major Port Trusts Act, 1963 (38 of 1963), the Tariff Authority for Major Ports hereby disposes of the proposal received from Kolkata Port Trust (KOPT) for determination of upfront tariff for stevedoring and shore handling operations at Haldia Dock Complex (HDC) of KOPT, as in the Order appended hereto. (T.S. Balasubramanian) Member (Finance)

2 Tariff Authority for Major Ports Case No. TAMP/79/2016-KOPT Kolkata Port Trust Applicant QUORUM (i). (ii). Shri. T.S. Balasubramanian, Member (Finance) Shri. Rajat Sachar, Member (Economic) O R D E R (Passed on this 19 th day of January 2018) This case relates to the proposal received from Kolkata Port Trust (KOPT) for determination of upfront tariff for stevedoring and shore handling operations at Haldia Dock Complex (HDC) at KOPT. 2. The Ministry of Shipping (MOS) has issued the guidelines for determination of upfront tariff for Stevedoring and Shore Handling Operation to all Major Port Trusts. In this backdrop, the KOPT has come up with a proposal in reference vide its letter dated 17 November The submissions made by KOPT in its proposal are summarized below: (i). (ii). (iii). (iv). (v). At HDC, stevedoring (on-board operation) is undertaken by the Port either by deployment of its own man-power or through contractor. For rendering such services, charges are realized directly from the customers based on TAMP approved rates. Therefore, the tariff for stevedoring operations is not proposed. Only upfront tariff for shore handling operation has been proposed. At HDC, equipment support on-board the vessels for handling cargo using ship s cranes is provided by the handling agents appointed by the importers/ exporters. The tariff for such equipment deployment has also been proposed. At HDC, the cargo handling equipment deployed by the handling agent for operation on-board (under conventional method) as well as on shore is either owned by themselves or is hired by them from various agencies as per their mutually accepted terms and conditions, not known to port. Although efforts were made by HDC for obtaining the market rates for hiring such equipment from the Handling Agents but the same could not be obtained officially from them. However, such rates have been gathered from various sources informally for the purpose of fixation of Upfront Tariff. TAMP may accept tariff proposal based on rates obtained informally as stated or provide directions as to how the issue is to be dealt. The performance norms for Stevedoring (on-board) operation have already been fixed by HDC following the Berthing Policy guidelines issued by the Ministry. The instant tariff has been proposed on the basis of the said performance norms in respect of handling of dry bulk cargo. However, for fixation of tariff for break bulk cargo, last 3 year s average ship-day productivity has been considered for fixing the performance norms. For handling bagged cargo, no separate deployment pattern of labours on shore have been prescribed in the Guidelines and only 10% of the equipment cost is to be considered as a labour cost. However, the handling of bagged cargo at jetty as well as at stack yard is labour intensive and as such, the deployment of labour is to be considered separately. Accordingly, the tariff for shore handling of bagged cargo has been proposed based on the actual deployment pattern of labour at hook points as well as at stack yard. The prevailing wage rates of such labours have been obtained informally. The rates so obtained are also found to be comparable with the CTC of contract labours hired by HDC.

3 (vi). (vii). (viii). (ix). (x). (xi). For handling project cargo, machinery and machinery products, no productivity norms and methodology for calculation of Upfront Tariff has been prescribed in the guidelines. However, the average productivity of such cargo handled during last 3 years has been considered and actual deployment of equipment during the handling of such cargo has been taken into account. The heavy project cargo/ machinery including the over dimension packages (ODCs) are directly discharged onto trailers or loaded directly from the trailer and as such these types of cargo are directly delivered/ received from/ at the hook points. Therefore, no shore handling charge have been considered in respect of such materials. In the overall approach of the tariff guideline, it has been stated that the Upfront Tariff and Performance standards notified by TAMP will be mentioned in the Bid Document and subsequently in the Agreement in respect of the operator. Clause - 3 (iv) of the Stevedoring and Shore Handling Policy provides that the Port Trust should be liberal in issuing license and all eligible agents would be issued the license. Further, the Royalty amount is also pre fixed by the Port. Accordingly, the policy does not seem to require selection of the best bidder. The bid for enlistment of agencies may thus be to only ensure that the selected agency fulfils the laid down criteria and agrees with the conditions. Clarity is required on the reference of Bid Document in the guidelines. The deployment pattern of cargo handling equipment on shore as given in the guidelines varies considerably with the actual deployment practice of such equipment at HDC. Further, the productivity at MHC berth varies significantly from Non MHC berths requiring different equipping profile at shore. The guidelines, however, does not provide any separate norm for MHC and non MHC Berths. HDC has prepared its proposal for upfront tariff based on actual deployment pattern of different equipment in MHC and non-mhc berths separately, which may be considered. The Annexure-IX of the guidelines specifies the norms for equipment on hire basis for shore handling operation of dry bulk cargo under different handling methods. Under Methods 1, 2, 3 and 5 of the said annexure, the deployment pattern of equipment has been separately specified for movement of cargo at a distance within 1KM and those for movement beyond 1KM. It is submitted that at HDC, quantity of the amount of cargo under two parameters cannot be measured, as multiple importers bring cargo in the same vessels and storage area are allotted to them in different parcels separately at various locations within the Port. There is no mechanism to determine the quantity of cargo moved into different plots on account of the same importer. Accordingly, proposal by KOPT is based on deployment of equipment on the basis of a single rate (i.e. beyond 1 KM) only. For the purpose of delivery/ receiving of cargo from/ to the dock, deployment of equipment are required for loading/ unloading of wagons/ trucks. This aspect has not been considered in the guidelines. As per clause-1 of the Stevedoring and Shore Handling Policy for Major Ports, the term Shore Handling includes receiving and delivery from wagons/ trucks. Further, the existing licensing policy of HDC regulates this activity. This activity is an integral part of the shore handling activity for a major part of cargo handled at HDC and not fixing the rate of such activity may not be appropriate. In fact, the existing licensing policy adopted at HDC also covers this activity. In absence of any norm, the details of equipment and manpower actually deployed in such activity is being compiled and a proposal for fixation of rate for such activity will be filed shortly. Clause 2.11 of the guidelines stipulates that before commencement of stevedoring and or the shore handling operation, the operator will approach TAMP for notification of the SOR containing the ceiling rates of the stevedoring and or the shore handling charges and performance standards as required under section 48 of the MPT Act In this connection, clarification is sought whether all the Handling Agents, who will be selected by the Port for undertaking Stevedoring and

4 Shore handling operation will have to approach TAMP individually for notification of the same SOR containing ceiling rates as approved by TAMP before commencing operation. (xii). (xiii). (xiv). (xv). (xvi). As per Clause 1.3 of the Guidelines, the guidelines will be applicable for authorization for stevedoring and shore handling activity under Section-42(3) of MPT Act. Section-42(3) of the Act provides Notwithstanding anything contained in this section, the Board may, with the previous sanction of the Central Government, authorize any person to perform any of the services mentioned in sub-section (1) on such terms and conditions as may be agreed upon. As previous sanction of Central Government is a pre-requisite for such authorization, clarification is sought whether for issuance of such license to each agency, separate approval of Central Government would be required. Regarding Clause of the guidelines, it is stated that at HDC the shore handling agents do not have their own labour and they are sourcing the labour force from the registered labour pools controlled by the labour Unions. These labours are paid monthly wages and their cost per shift have been calculated based on the same. At HDC, the performance norms for Stevedoring (on-board) operation has also been considered for the shore handling operation for fixation of Shore handling tariff. However, at berth no. 2 & 8 of HDC, the shore handling contractor have been allowed maximum six hours time after the completion of vessel s operational work to remove the cargo from the jetty. In the existing shore handling license which is valid till also, similar allowances have been granted. While proposing the shore handling tariff, allowance have been considered. At HDC due to limited storage/ staking space, heaping / high- heaping for dry bulk cargo is often required to be done at the plots for which poclain is used along with pay loaders. In the calculation of upfront tariff we have factored equipment required for this activity on actual basis. TAMP may consider the same. In the cases relating to tariff fixation for Ports and BOT Operators, the foreign rates are increased to cross subsidize the coastal traffic. However, in case of guidelines for Stevedoring and Shore Handling no such provision is there. Further, the selected agencies will not have any exclusive jurisdiction to operate, unlike that of BOT Operator, which operators a Berth. Accordingly, one agent may get to service Foreign Cargo while other may handle coastal cargo. The agent handling coastal cargo may not get any opportunity to cover the loss in handling the coastal cargo through handling of foreign cargo. Accordingly, it is difficult to accommodate the coastal concession. TAMP may consider the above and allow fixation of upfront tariff in respect of coastal cargo without any rebate/concession. (xvii). At HDC, bagged cargo is neither directly discharged on trucks nor directly delivered from jetty. Bag cargo is discharged normally by ship s cranes and stored in shed inside the dock premises. Moreover, the productivity of bag cargo do not vary to a great extent for different commodities and it is more or less uniform for 50 kg bags irrespective of its contents. Thus, uniform shore handling tariff has been proposed for handling 50 kg bags which are normally handled at HDC. The average hook shift productivity of such cargo has been considered to be 150 MT and average deployment of 3 hooks per shift has been considered. (xviii). In the Guidelines, no norm for anchorage discharge and barge handling has been provided. In absence of such norms, the proposal does not include for fixation of upfront tariff for stevedoring activity for anchorage loading/ discharge and Stevedoring and Shore-handling activities associated with barge handling at the Port. However, Kolkata Dock system (KDS) of KOPT has already proposed rates for these items even though there is no norm for the same. If TAMP considers to fix the rate for HDC also, then the same will be proposed subsequently considering the

5 contract provisions for engaging floating crane for handling barges at the anchorage and also at the proposed barge jetty of HDC, as well as any other berth/ jetty of HDC. (xix). The performance norms for Shore Handling Agents have not been specifically proposed. However, TAMP may consider the following performance norms for the Shore Handling Agents: (a) (b) The shore handling agent will be allowed 6 hours time in case of dry bulk cargo and 2 hours time incase of break bulk cargo after completion of vessel s discharge/loading to clear the cargo from the jetty either by way of removal to the stack yard or by way of direct delivery from the jetty. However, if the agent fails to do so, then for every additional hour or part thereof taken by the Handling Agent to clear the cargo, he has to pay two times the berth hire charges after expiry of initial 6 hours / 2 hours time as the case may be. If the Shore Handling Agent fails to clear the cargo from the jetty within 6 hours/ 2 hours as the case may be for 3 consecutive vessels, then Chairman may at any time suspend the license for such period as he may deem fit or cancel the license or refuse to renew the license The KOPT, while seeking the approval on the upfront tariff /Ceiling rates and while formulating the productivity norms for stevedoring and shore handling operations at HDC has reported to have made some assumptions. The assumptions made by KOPT are as follows: (i). (ii). (iii). (iv). (v). At the MHC berths (No. 2, 8, 4B & 13) the equipment (Pay loader) service in the hatches of Dry Bulk cargo ship is provided by HDC through its appointed contractors for respective berths. However, at other berths, port does not provide Pay loader in hatches. On behalf of the Importers, the Handling Agent deploys Pay loader & equipment in hatches. Pay loader in hatches is not required from the very beginning of discharge work. The same is required only for the bottom cargo when collection of cargo from all corners inside the hold becomes necessary. Therefore, actual deployment of Pay loader per vessel has been considered. Basis utilization of Pay loaders in hatches in the past, the total equipment-shifts and the average parcel load of 25,000 MT has been considered for the purpose of calculation of the tariff. However, unlike deployment of big pay loader on shore, smaller pay loaders are deployed inside the ship's holds. The hiring charge has been considered accordingly. In case of Payloader service provided in hatches, the actual quantity of cargo handled by Payloaders onboard cannot be assessed. Therefore, the per ton charge has been calculated on the basis of the entire parcel load of 25,000 MT cargo and productivity has not been taken into consideration for the purpose of calculating the rate. The tariff for Pay loader deployment in hatches of Dry Bulk cargo ships varies from ` per tonne to ` per tonne. However to avoid complication in maintaining data, uniform ` per MT for all Dry Bulk cargo is proposed. In case of direct delivery of cargo discharged by ship s crane, the cargo with higher productivity needs more pay loader at jetty for quicker loading of cargo on the delivery vehicle so as to avoid difficulty in discharge operation from accumulation of high volume of cargo at jetty. Accordingly, for the cargo having productivity less than 3000 ton per shift, 4 Pay loaders per shift on jetty are deployed and for cargo with productivity above 3,000 ton per shift, 6 Pay loaders per shift are deployed on jetty. At MHC Berths of HDC, delivery of cargo directly from hook points of the ship is not encouraged by HDC and no such operation has taken place at HDC so far. However, considering the provision of the Guideline regarding fixation of tariff for

6 cargo discharged on Jetty and moved to consignee premises, the tariff is created for the same. (vi). (vii). (viii). In view of high productivity of MHCs (for Dry Bulk cargo), 4 Payloaders per hookpoint has been proposed in the interest of smooth operation when the cargo is delivered directly from jetty to consignee premises. Out of 4 Payloaders, 2 to be utilized for loading of cargo from Jetty onto trucks and the balance 2 to be used for shifting cargo from the hook-points to jetty-back up so as to enable free operation of hooks. In case of Dry Bulk cargo discharged by ship s crane and moved to storage area inside port, for productivity upto 3500 MT per shift 4 payloaders is deployed on shore. For productivity above 3500 MT per shift, 6 payloader deployment on jetty is necessary to clear the cargo. Similarly for cargo with productivity upto 3500 MT per shift 16 Dumpers and for cargo having high productivity of more than 3500 MT per shift, 24 Dumpers per shift is required to be deployed. In case of Dry Bulk for considering the extra time of 6 hours for clearance of entire cargo for the jetty, the per shift productivity has been assessed as per the following formula:- As per Berthing Policy, discharge of 20,000 MT cargo needs 3 shifts Therefore, at the same rate, discharge of 25,000 MT Cargo needs 3.75 shifts Extra Time required for evacuation of Entire Cargo from Jetty is 6 Hr. i.e shift Permissible Time of Engaging Equipment on Shore for clearnce of 25,000 MT cargo is ( Shift) = 4.5 Shifts Basis above, Per Shift Productivity for a parcel load of 25,000 MT is (25,000 MT / 4.5 Shift) = 5,556 MT Per Shift. (ix). At HDC, Project Cargo comes in small ships usually having 2 cranes onboard. Accordingly, only 2 hooks per shift can be worked, which has been considered in the assessment of tariff. The Berthing Policy of HDC does not contain any provision regarding productivity of Iron & Steel cargo. Therefore, the average productivity of Bag Cargo, Project Cargo and Iron & Steel cargo during the last three years ( to ) has been considered in the assessment of upfront tariff for such cargo. (x). (xi). (xii). Most of the project cargo arriving at Haldia is heavy packages and/or over dimensional packages which are unloaded from ship direct onto trailers/ barges and taken directly to the consignee premises. Such cargo does not require service of Handling Agent on shore and hence does not involve any shore handling charge thereof. Other project cargo in smaller packages is either unloaded from ship onto truck and then transported to dock yard for storage or (in some cases) unloaded onto Jetty then loaded by Forklift onto trailer and subsequently transported to storage yard. At the yard, the cargo is unloaded by Forklift or crane of lower capacity. The tariff exercise is done considering the aforesaid handling involving storage of cargo in port premises. For such smaller packages of project cargo forklifts of lower capacity are used and the hire charge has been considered accordingly. The Upfront Tariff proposed will be the ceiling rates and chargeable subject to achieving the productivity level prescribed in the proposed Scale of rates for Upfront Tariff for Stevedoring and Shore Handling Operations undertaken by the port authorised private Handling Agents at HDC. For Direct Delivery of cargo from jetty to consignee premises, the shore handling charge will cover only loading of cargo from the Jetty on to trucks for going directly to consignee premises or vice versa.

7 (xiii). The common conditionality to be framed by TAMP for inclusion in the Scale of rates may also be included in the Scale of rates being proposed by HDC Alongwith the proposal dated 17 November 2016, the KOPT has also furnished the following: (i). Assessment of Shore Handling Tariff for Dry Bulk Cargo - Discharged by Ship's Cranes & Direct Delivery to Consignee (ii). (iii). (iv). Assessment of Shore Handling Tariff for Dry Bulk Cargo - Discharged by MHC & Delivered Directly from jetty Assessment of Shore Handling Tariff for Dry Bulk Cargo - Discharged by Ship's Cranes & Stored within Port premises Assessment of Shore Handling Tariff for Dry Bulk Cargo - Discharged by MHC & Stored in Dock Premises (v). Assessment of Onboard Payloader deployment Tariff for Dry Bulk Cargo - Discharged by Ship's Crane (vi). (vii). (viii). Assessment of Shore Handling Tariff for Bag Cargo - Discharged by Ship's Crane & Stored in dock premises Assessment of Shore Handling Tariff for Project Cargo - Discharged by Ships Cranes & moved to storage place inside Port premises Assessment of Shore Handling Tariff for Iron & Steel Cargo - Discharged by Ship's Crane & Stored in dock premises (ix). Assessment of On board Equipment deployment Tariff for Project Cargo - Discharged by Ships Crane (x). Assessment of On board equipment deployment Tariff for Steel Cargo - Discharged by Ships Crane 4.1. The KOPT vide its dated 20 December 2016 has furnished Copy of the extract of the draft resolution of the Board vide N. R/142/HDC/Sh&CH/3/11/2016 dated , draft Scale of Rates (SOR) alongwith conditionalities governing the SOR and proposed Performance Standards Accordingly, the proposal of KOPT seeks approval for the following: (i). Charges for Supply & Service of Equipment in hatches on-board ship at berth for discharging cargo by using ship s crane. Sl. No. Commodity Rates per Tonne (In `.) (a) Charges for Supply & Service of Payloader in hatches on-board ship at berth for discharging Dry Bulk cargo by using ship s crane. 1. All Dry Bulk cargo viz Coking Coal, Other Coal (except Thermal Coal), Met. Coke, Lime Stone, Manganese Ore, Iron Ore Fines & Lumps, MOP, Rock Phosphate, Sulphur, Clinker, Gypsum, Sugar etc (b) Charges for Supply & Service of Equipment in hatches on-board ship at berth for discharging Break Bulk cargo by using ship s crane. 1. Project Cargo, Machinery, Spares CR Sheets, HR Plates, Steel Sheets, Steel Slabs Steel Coils, HR Coils, WR Coils Steel billets, Steel blooms, Steel Rails, Pipes and Tubes 37.88

8 Note : The rates under (i) will be applicable uniformly on the entire quantity of cargo discharged from the ship at the berth, irrespective of the actual time of use of the equipment. Subsequently, the KOPT while responding to the comments of the users vide its letter dated 02 March 2017 has proposed to include the following notes below the above referred table: (ii). (iii). On board equipment services will include supply and service of suitable payloader/ equipment on board for transfer/ aggregation of cargo at hatch square on the ship by transferring from other areas inside the hatch, including slinging and un-slinging of pay loader/ equipment for lifting up of lifting down on/ from the ship. The rates under this section will also be applicable for shore handling operations in respect of export cargo shipped by MHC/ Ship s crane. (ii). Charges for shore handling operation Sl. No. (a). Dry Bulk cargo Commodity Discharged by ship s crane and delivered directly from Jetty to consignee premises. Discharged by MHC and delivered directly from Jetty to consignee premises (Rates per Tonne) Discharged Discharged by Ship s by MHC and Crane and transferred & transferred stored in & stored in area inside storage area port inside port premises premises. (1) (2) (3) (4) (5) (6) ( `.) ( `.) ( `.) ( `.) 1. Coking Coal, Other Coal (except Thermal Coal) Met. Coke Lime Stone Manganese Ore Iron Ore Fines & Lumps 6. MOP, Rock Phosphate, Sulphur 7. Clinker Gypsum Sugar (b). Break Bulk cargo (Rates per Tonne) Sl. Commodity Discharged by No. Ship s Crane and transferred & stored in area inside port premises. (In `.) 1. All Bag cargo containing Fertiliser, Food grain, Sugar, Cement and other commodities having unit weight upto 50 kg. 2. CR Sheets, HR Plates, Steel Sheets, Steel Slabs Steel Coils, HR Coils, WR Coils 55.70

9 4. Steel billets, Steel blooms, Steel Rails, Pipes and Tubes Project Cargo, Machinery, Spares Note: If any new cargo is handled which is not included in the list, then KOPT will categorize the cargo with any of the aforesaid cargo groups based on the nature, physical characteristics and method of handling of that cargo. Note to (ii). (a). (b). For transfer/ delivery of cargo from Jetty direct to consignee s premises, the above rate does not include supply of transport (for delivery) by the Handling Agent. The same shall be arranged by the concerned importer/exporter/receiver of cargo, at their own cost. In case of Bag cargo (unit bag weight upto 50kg), the shore handling charge includes supply of trucks by the Handling Agent for transportation of cargo between the jetty and the storage yard including loading & unloading on and from truck in such operation. Subsequently, the KOPT while responding to the comments of the users vide its letter dated 02 March 2017 has proposed to include the following notes below the above referred table: (c). (d). (e). The rate mentioned at column (5) and (6) above include charges for heaping/ high heaping of cargo at the storage yards. Incase of break bulk cargo indicated at sl. No. 2, 3, 4 and 5, the shore handling charges include supply of trailers by the Handling Agents for transportation of the cargo between the jetty and the storage area including loading and unloading on and from trailers thereat. The rates under this section will also be applicable for shore handling operations in respect of export cargo shipped by MHC/ Ship s crane. (iii). Stevedoring and Shore Handling Agents working at HDC, who will be issued license for undertaking such work under Kolkata Port Trust (Stevedoring and Shore Handling) Regulations, 2016 shall comply with the following productivity norms and the ceiling rate proposed is subject to fulfillment of productivity norms. (a). For the purpose of levy of rates under this SOR, achievement of the following productivity levels will be applicable. Dry Bulk Cargo Sl. No. Cargo Group Productivity Norms in Tonnes per Ship-Day (in terms of the Mode of Operation) By MHC [2 MHCs working simultaneously] By Ship s Crane 1. Coking Coal, Other Coal 20,000 8,300 (except Thermal Coal) 2. Met. Coke 20,000 8, Lime Stone 20,000 13, Manganese Ore 20,000 9, Iron Ore Fines & Lumps 20,000 13, MOP, Rock Phosphate, 20,000 8,000 Sulphur 7. Clinker, Gypsum 20,000 14, Sugar 20,000 8,300 Note:

10 (i). (ii). In case of operation with single MHC, the productivity norm will be MT per day. The Shore Handling Agents will be required to match the aforesaid productivity norms of loading/unloading to ensure that there is no detention in loading/unloading operation of the vessel due to reasons attributable to the Stevedoring & Shore Handling Agent. Break Bulk Cargo handled by ship s crane Sl.No. Commodity Productivity Norms in Tonnes per Hook per Shift 1. All Bag Cargo, Project Cargo, 150 Machinery, Spares 2. CR Sheets, HR Plates, Steel Sheets, 256 Steel Slabs 3. Steel Coils, HR Coils, WR Coils Steel billets, Steel blooms, Steel Rails, Pipes and Tubes 195 (b). (c). (d). Norms for Clearance of Cargo from Jetty and Penalty for Non-Achievement of the same. The shore handling agent will be allowed 6 hours time in case of dry bulk cargo and 2 hours time in case of break bulk cargo from the time of completion of vessel s discharge/loading to clear the cargo from the jetty either by way of removal to the stack yard or by way of direct delivery from the jetty. If the agent fails to achieve the above said norms as per (c), then for every additional hour or part thereof taken by the Handling Agent to clear the cargo he will pay two times the berth hire charges after expiry of initial 6 hours / 2 hours time as the case may be. (e). If the Shore Handling Agent fails to clear the cargo from the jetty within 6 hours / 2 hours as the case may be for 3 consecutive vessels, then Chairman may at any time suspend the license for such period as he may deem fit or cancel the license or refuse to renew the license. Note: In case of MHC Berth, the time of the last MHC cycle/unloading of last pay loader from the vessel as the case may be as certified by HDC will be considered as the completion time in case of unloading of cargo. 5. In accordance with the consultative procedure prescribed, a copy of the KOPT proposal was forwarded to the concerned users/ user organizations/ stevedore associations vide our letter dated 22 December 2016 and to the additional users/ user organizations/ stevedore associations as suggested by KOPT, vide our letter dated 6 January 2017, seeking their comments. Some of the users/ user organisations/ stevedore association have furnished their comments. The said comments were forwarded to the KOPT as feedback information. The KOPT has responded to the comments of the users/ user organisations/ stevedore association vide its letter dated 02 March In the meantime, considering that the proposal is under consultation and as it may take some more time to dispose of the case and keeping in view that the Ministry of Shipping (MOS) has directed this Authority for immediate action, this Authority vide its Order dated 8 February 2017 has granted adhoc approval to the upfront tariff for stevedoring and shore handling operations and Performance Standards as proposed by the HDC of KOPT, as an interim arrangement, pending fixation of final rates by this Authority after completion of the consultation process. This Authority has also directed that the final rates to be approved by this Authority will have a prospective effect

11 and that the interim rate adopted in an ad-hoc basis will be recognised as such and further that there will not be any question of refund/ recovery, if any, in case of variation between ad-hoc rates and final rates. 6.2 The said Order has been notified in the Gazette of India Extraordinary (Part III Section 4) on 21 February 2017 vide Gazette No. 63. The Notification and Order has been communicated to the KOPT and the concerned users/ user organisation vide our letter dated 24 February In response to this, T.P. Roy Chowdhury & Company Pvt Ltd (TPRRCPL), Master Stevedores Association (MSA), Ripley & Co. Stevedoring & Handling Pvt Ltd (RCSHPL) and A.M. Enterprises have generally stated that the interim Order passed by this Authority will cause immense damage and inconvenience to trade, as the anomalies and the actual labour cost and equipment cost as brought out by them in their earlier correspondences, has not been considered while passing the interim Order. Thus, the above said users have requested to consider the submission made by them on the KOPT proposal in reference, before implementation of the said Order dated 8 February A joint hearing in this case in reference was held on 25 January 2017 at the KOPT premises in Kolkata. The KOPT made a brief power point presentation of its proposal. At the joint hearing, the KOPT and the users have made their submissions. 8. As decided at the Joint hearing, some of the users or user organization / stakeholders have furnished their comments. The said comments were forwarded to the KOPT as feedback information. The KOPT has responded to the comments received from the users/ user organizations/ stevedore associations vide its letter dated 02 March In the meanwhile, the KOPT vide its letter no. MTO/G/115-M/Pt.II/GMT-64 dated 14 February 2017 has submitted its proposal for fixation of ceiling rates for receiving and delivery operations at HDC. The main points made by KOPT in its letter dated 14 February 2017 are summarized below: (i). (ii). (iii). (iv). (v). Based on Stevedoring and Shore Handling Policy for the Major Ports issued by the Government, KOPT vide its letters dated 17 November 2016 and subsequent letter dated 19 December 2017 has filed a proposal for fixation of upfront tariff for stevedoring and shore handling operations at Haldia Dock Complex (HDC). However, the proposed SOR does not include the rate for loading/ unloading of cargo at the storage yard/ shed for the purpose of delivery/ receiving. Since the delivery and receiving operations are integral part of the Shore handling activity, as per the Stevedoring and Shore Handling Policy, 2016, upfront tariff has been calculated for receiving/ delivery operation based on the actual deployment of equipment/ labour at HDC. Besides, the existing licensing scheme adopted by HDC also covers receiving and delivery operations and under the said policy royalty is recovered by HDC, from the handling agents on the entire shore handling operation including delivery and receiving. Moreover, unless the total shore handling rate is fixed, the decision on the quantum of royalty payable by the Handling Agent cannot be ascertained. As the guidelines does not contain norms in respect of delivery and receiving operations, the matter was referred by KOPT to MOS as well as to TAMP and the matter was discussed in the TAMP s workshop on TAMP was requested to provide guidelines in the matter as the shore handling services undertaken by the Handling Agents at HDC include delivery and receiving operations as well.

12 (vi). (vii). (viii). The new Stevedoring and Shore Handling Scheme shall be made applicable at HDC after expiry of the existing licensing scheme of HDC, i.e. from 1 April The Handling Agency licenses issued under the existing scheme of HDC includes Delivery & Receiving operation as the integral part of shore handling services and the royalty is received by KOPT from the Handling Agents by considering the entire shore handling operations from landing/ receiving to delivery/ shipment of cargo. In view of the above, to avoid difficulties in operations as well as for issuance of new shore handling licence, the upfront tariff for delivery and receiving operation has been calculated on the basis of actual deployment of equipment and/ or labour for such operations at HDC. Accordingly, a draft Scale of rates for fixation of upfront tariff/ ceiling rate for Receiving & Delivery operations at HDC has been framed and the same has been approved by the Board in its meeting held on The KOPT has reported to have made some assumption in its proposal for fixation of upfront tariff/ Ceiling rates. The assumption made by KOPT are as follows: (i). (ii). (iii). (iv). (v). (vi). For delivery/ receiving of cargo from/ to dock, deployment of equipment is required for loading/ unloading of wagons/ truck. In case of bag cargo (other than pre-slung bags), such loading/ unloading is done manually which requires substantial deployment of labour. The Guidelines for Fixation of Upfront Tariff for Stevedoring and Shore Handling Operations authorised by Major Ports does not include any stipulation regarding equipment deployment and norm about delivery & receiving operations. For assessing the upfront tariff for delivery/ receiving operations, the actual deployment pattern of cargo handling equipment for delivery of the major commodities at HDC has been considered. [The calculation sheets are furnished by KOPT.] The delivery and receiving of cargo depends on various factors attributable to the importer/ exporter, viz., arrangements involving documentation, payment of port charges, supply of transport etc. Besides, factors like queuing of transport vehicles at the port operated weighbridges and congestion on roads etc. also influence the pace of delivery and receiving operations. Therefore, it is not practicable to fix any performance norms for delivery and receiving operations separately. The proposal of KOPT is based on actual deployment pattern of equipment At HDC, the cargo handling equipment deployed by the handling agent for operation on-board (under conventional method) as well as on shore is either owned by them or is hired by them from various agencies as per their mutually accepted terms and conditions not known to Port. Although, efforts were made by HDC for obtaining the market rates for hiring such equipment from the Handling Agents but the same could not be obtained officially from them. However, such rates have been gathered from various sources informally for the purpose of fixation of Upfront Tariff. In case of delivery and receiving of cargo by railway wagons, the assessed tariff will be applicable for completion of the rake loading/unloading operations within the free time stipulated under railway rules prevailing from time to time. In case of failure to complete loading/ unloading of rakes within the free time, the consequential demurrage accrued for the delay in rake loading will be payable by the Handling Agent to the concerned importer/exporter. In case of project cargo deployment of equipment for loading unloading operation is not uniform throughout the shift as the same depends on shape, size and weight of the cargo. Moreover the delivery receiving program is made by the Importers/ Exporters as per their requirement and suitability which lead to frequent idling of equipment during delivery/ receiving of project cargo. Therefore, assessment of tariff for delivery/ receiving operation of cargo is difficult. However, an indicative tariff

13 has been assessed on the basis of information gathered from the existing handling agents. (vii). (viii). (ix). (x). (xi). (xii). Regarding Clause of the guidelines, it is to state that at HDC, the shore handling agents do not have their own labour and they are sourcing the labour force from the registered labour pools controlled by the labour Unions. These labours are paid monthly wages and their cost per shift has been calculated based on the CTC including the fringe benefits. For Dry Bulk cargo the similar approach of assessment, as done in case of shore handling operations, has been adopted by considering Operational Overhead and Administrative 20% of the total of Equipment & Labour cost and 20% of the total operating cost. In view of no deployment of labour deployment by the Handling Agent for road delivery of Dry Bulk cargo, any cost of labour has not been considered for such operation. In the said guidelines regarding fixation of upfront tariff for Stevedoring & Shore handling of bag cargo, TAMP has only considered 10% of the equipment cost as a labour cost. However, the operations of delivery and receiving of bag cargo as well as manual unloading of cargo from railway rake are labour intensive and as such the deployment of labour is to be considered separately. Accordingly, the tariff for delivery/receiving operations for bag cargo and manual unloading of cargo from railway rake has been proposed based on the actual deployment pattern of labour vis-à-vis the per capita datum of cargo to be loaded/unloaded by each labour as per the union rules of the local labour supplier as gathered informally. The prevailing wage rates of such labours have been obtained informally. The other components viz Operational Overhead, Administrative overhead and Margin has been considered similar to the said guidelines. The labour rates so obtained are also found to be comparable with the CTC of contract labours hired by HDC. The bag cargo moving through HDC is more or less in uniform bag size of 50 Kg each irrespective of its contents. Thus uniform tariff for delivery and receiving has been proposed for handling 50 kg bags which are normally handled at HDC. The Upfront Tariff proposed will be the ceiling rates. The common conditionality to be framed by TAMP for inclusion in the Scale of rates may also be included in the Scale of rates being proposed by HDC. (xiii). The information used in the assessment are gathered informally through verbal discussion with different users and there is no scope to validate the same with documents/records Accordingly, the KOPT has sought approval for the following in its proposal dated 14 February 2017: (i). Charges for Delivery / Receiving of Dry Bulk cargo by road, from the storage areas inside port premises. Sl. Commodity Rates per Tonne No. (in `.) 1. All Dry Bulk cargo (ii). Charges for Delivery of Dry Bulk cargo by rail, from the storage areas inside port premises (including aggregation of cargo at wagon loading area, post loading clearance and shifting back of balance cargo & restacking of the same in storage area).

14 Sl. Commodity Rates per Tonne No. (in `.) 1. All Dry Bulk Cargo (iii). Charges for Receiving of Dry Bulk cargo by manual unloading from wagons, at the storage areas inside port premises including shifting of cargo from the wagon face to immediate back up area of the rail yard by equipment. Sl. Commodity Rates per Tonne No. (in `.) 1. All Dry Bulk Cargo (iv). Charges for Delivery / Receiving of Bag cargo by road, from / at the storage areas inside port premises Sl. Commodity Rates per Tonne No. (in `.) 1. All types of Bag cargo (of 50 kg bag) (v). Charges for Delivery / Receiving of Bag cargo by rail, from / at the storage areas inside port premises (including transportation of cargo from storage area to rail siding or vice versa). Sl. Commodity Rates per Tonne No. (in `.) 1. All types of Bag cargo (of 50 kg bag) (vi). Charges for Delivery / Receiving of Project Cargo by road, from / at the storage areas inside port premises. Sl. No. Commodity Rates per Tonne (in `.) 1. Project Less than 5 tones cargo 5 tonnes to less than 10 tonnes tonnes to less than 20 tonnes tonnes to less than 40 tonnes Note: Project Cargo weighing more than 40 tonnes is unloaded/loaded directly on/from transport vehicles and no further loading/unloading is required at the time of delivery/receiving. (vii). Charges for Delivery / Receiving of Iron & Steel Cargo by road, from / at the storage areas inside port premises. 1. CR Sheets, HR Plates, Steel Sheets, Steel Slabs CR Coils, HR Coils, GP Coils (Unit piece weight upto 10 Ton) CR Coils, HR Coils, GP Coils (Unit piece weight Ton) Steel billets, Steel blooms, Steel Rails WR Coils 45 (viii). Charges for Delivery / Receiving of Iron & Steel Cargo by rail, from / at the storage areas inside port premises including intermediate transportations. Sl. No. Commodity Rates per Tonne (in `.) 1. CR Sheets, HR Plates, Steel Sheets, Steel Slabs CR Coils, HR Coils, GP Coils

15 3. Steel billets, Steel blooms, Steel Rails WR Coils (ix). The performance norms proposed by KOPT for fixation of upfront tariff / ceiling rates for receiving and delivery operation is as follows: (a). (b). In case of rail borne cargo the Handling Agents are required to complete loading/unloading of cargo on/from the railway rakes within the stipulated free time as per the railway rules as may prevail from time to time. In case of failure to complete loading/unloading of the rake within the stipulated free time, demurrage as may be applicable will be payable by the handling Agent to the importer/exporter concerned. In case of road bound cargo no norms for loading/unloading of cargo for delivery/receiving can be fixed as the supply of transport depends on the importer/exporter and the handling Agents have no role in it Alongwith the proposal dated 14 February 2017, the KOPT has also furnished workings with regard to the following: (i). (ii). Assessment of charge for delivery / receiving of dry bulk cargo by road from / at storage spaces inside dock Area at HDC. Assessment of charge for delivery / receiving of dry bulk cargo by rail from storage spaces inside dock Area at HDC. In this regard, the HDC has stated the following: (a). (b). In view of involvement of labour in substantial number for cleaning, trimming, lime spraying, door fixing, labelling etc., labour cost on actual deployment basis is considered. For assessing labour cost the CTC per `. 22,500/- per month is considered as per information gathered informally. The rate of Payloader Charge considered is as per information gathered informally from the Handling Agents. Prior to delivery aggregation of cargo at wagon loading area as well as post-loading clearance as well as shifting back of balance cargo & restacking of the cargo in the storage space is also required for which equipment assistance is necessary. Therefore, though actual wagonloading time ranging around 5 hour, the deployment of payloader and charge thereof has been considered on full shift basis. (iii). (iv). Assessment of charge for receiving of dry bulk cargo through manual unloading from railway wagons for storage at areas inside dock area at HDC. Assessment of upfront tariff for delivery / receiving of bag cargo by road. In this regard, the HDC has stated the following: (a). (b). The rate of loading for delivery of cargo is dependent on supply of trucks/lorries by the importer/exporter. The per shift loading quantity has been assessed considering the following:- (i) Loading of 6 lorries per hour. (ii) Loading of 200 bags per lorry (iii) Weight of each bag as 50 Kg (iv) Loading time in shift as 7.5 hour. (v). Assessment of upfront tariff for delivery / receiving of bag cargo by rail (including manual loading of cargo trucks in shed, transportations of cargo from shed to wagons by truck and subsequent loading of cargo from lorry onto wagons). In this regard, the HDC has stated the following:

16 (a). (b). (c). (d). The assessment is based on deployment of 4 labours per wagon At Haldia the labour is supplied through a private pool of workers commonly known as 'Cargo Pool'. As per existing union rules, the labour get monthly wages along with statutory benefits which is quite high. For transportation of bag cargo, there prevails fixed fleet of trucks which are not used for transportation of other cargo. The per labour loading limit is controlled by labour unions. The foregoing factors resulted in high per ton cost for handling of bag cargo (in 50 kg bags) at Haldia. At Haldia transfer of bag cargo from hook point to wagons or vice versa is carried out through deployment of trucks in view of the location of the shed and the railway sidings. However, at HDC due to high labour cost the calculated rate is as high as ` /- per ton. The above assessed tariff will be applicable for completion of loading/unloading of rake within the stipulated free time allowed as per Indian Railway rules. (vi). Assessment of upfront tariff for delivery receiving of project cargo by road. In this regard, the HDC has stated the following: (a). (b). (c). (d). (e). The above rates have been assessed considering loading/ unloading of one unit of package at a time. In case of Project Cargo, loading/unloading is not uniform throughout the shifts or even through the days and programme for delivery /receiving is arranged by importers/exporters on piece meal basis in very small parcels from time to time. Therefore assessment of tariff for project cargo is difficult. However, basis information informally gathered, an indicative tariff has been assessed as shown in the above table. Considering the equipment s engaged in loading/unloading operation, NO LABOUR involvement is considered in case of deployment of FORKLIFTS only. In case of Mobile Cranes, labour deployment has been considered on actual basis. Accordingly, the criteria of considering Labour 10% of Equipment Cost has not been considered in the instant assessment. The per shift delivery quantity as well as pattern of equipment deployment have been considered on the basis of informal information gathered verbally from Handling Agents and the same cannot be validated by records. The packages weighing above 40 Ton are unloaded / loaded by ship's cranes directly on / from specialised cargo carrying vehicles for direct delivery/receiving. (vii). Assessment of upfront tariff for delivery / receiving of steel cargo by road. In this regard, the HDC has stated the following: (a). (b). Direct assessment of productivity level per shift for delivery/receiving of Iron & Steel cargo is not possible, as the loading for delivery operations are dependent on supply of trailers by the importer/exporter. However, depending upon the time taken to load/unload one trailer and quantity handled on/ex one trailer, per shift productivity has been assessed. The deployment pattern of equipment & labour has been considered as per the practice in vogue at HDC.

17 (c). Considering the equipment s engaged in loading/unloading operation, NO LABOUR involvement is considered in case of FORKLIFTS. In case of Mobile Cranes, labour deployment has been considered on actual basis. Accordingly, the criteria of considering Labour 10% of Equipment Cost has not been considered in the instant assessment. (viii). Assessment of upfront tariff for delivery / receiving of steel cargo by rail (including manual loading of cargo on trailers in storage area, transportation of cargo from shed to wagons by Trailers and subsequent loading of cargo from trailers onto wagons). In this regard, the HDC has stated the following: (a). (b). (c). (d). The above Steel cargo is primarily transported in BOX-N wagons therefore cranes are required to be deployed for loading/unloading of cargo on/from wagons The deployment pattern of equipment & labour has been considered as per the practice in vogue at HDC. It is assumed that one full rake carrying 2,500 MT cargo is handled per shift. At wagon points 4 labours are required to be deployed per crane while at yard 2 labours are required to be deployed per crane as per the existing practice 10. In accordance with the consultative procedure prescribed, we have vide our letter dated 21 February 2017 forwarded a copy of the KOPT proposal dated 14 February 2017 to the concerned users/ user organizations for their comments. Some of the users/ user organisations/ stevedore association have furnished their comments. The said comments were forwarded to the KOPT as feedback information. The KOPT has responded vide its letter dated 23 March Based on the preliminary scrutiny of the KOPT proposal, additional information/ clarification was sought from KOPT vide our letter dated 07 August After a reminder dated 13 November 2017, the KOPT has responded vide its letter dated 20 November The information/ clarification sought by us and the response of KOPT thereon are tabulated below: Sl. No. (i)(a) (i)(b) Information/ Clarification sought by us Detailed workings in support of the ship day productivity in respect of each of the cargo item envisaged to be handled by ship cranes and by HMCs separately to be furnished. Though the KOPT has reported to have arrived at tariff for shore handling in Response from KOPT At HDC, Dry Bulk Cargo is handled by ship s cranes primarily at Berth No.9 while the same is handled by MHCs at Berth Nos. 2, 4B, 8 & 13. For handling by ship s cranes, the Performance Norms have been assessed as per the Guidelines mentioned in the Berthing Policy while for MHCs, the contractual Performance Norms have been considered. It may be stated that as per the contract, at MHC operated berths the Benchmark Productivity Norms is 20,000 MT per day for handling by 2 MHCs irrespective of the nature of Dry Bulk cargo. The Performance Norms calculated for Berth No.9 for various Dry Bulk cargo is furnished. At the MHC berths of HDC, dry bulk cargo handling is done by using MHC only. Only